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| Eurozone crisis live: Lagarde warns oil could be the new Greece | Eurozone crisis live: Lagarde warns oil could be the new Greece |
| (40 minutes later) | |
| 2.21pm: Just in – the Greek seamen's union had voted to end the strike action that has been disrupting ferries across the country. | |
| That follows today's negotiations (see 1.47pm). It's not clear whether the government offered any concessions, but on paper it looks like good news for Greece. | |
| 2.00pm: Evangelos Venizelos, Greece's departing finance minister, has just started addressing the parliamentary group of PASOK, his first speech to the socialist party since replacing George Papandreou at its helm on Sunday. | 2.00pm: Evangelos Venizelos, Greece's departing finance minister, has just started addressing the parliamentary group of PASOK, his first speech to the socialist party since replacing George Papandreou at its helm on Sunday. |
| "Greeks wants stability and security," Venizelos told his MPs, saying that ahead of general elections Greece "as of today will enter an especially criticial" phase. | "Greeks wants stability and security," Venizelos told his MPs, saying that ahead of general elections Greece "as of today will enter an especially criticial" phase. |
| "It is very important that we tell the truth to the Greek people," he continued, in a speech officially kicking off the electoral campaign | "It is very important that we tell the truth to the Greek people," he continued, in a speech officially kicking off the electoral campaign |
| With Pasok's support down badly in the polls, Venizelos admitted that the party must rebuild from scratch, but also praised his MPs for their "heroic" stance in supporting deeply unpopular fiscal policies demanded by foreign lenders in return for keeping the country's economy afloat. | With Pasok's support down badly in the polls, Venizelos admitted that the party must rebuild from scratch, but also praised his MPs for their "heroic" stance in supporting deeply unpopular fiscal policies demanded by foreign lenders in return for keeping the country's economy afloat. |
| "Pasok, the big progressive democratic party has more strengh than anyone may think," he said. | "Pasok, the big progressive democratic party has more strengh than anyone may think," he said. |
| 1.47pm: The talks between striking Greek seamen and the country's development and labour ministries (see 11.31am) have just wrapped up but not, we can report, on the best of notes. Emerging from the negotiations members of the seamens union, PNO, said they would now hold talks to decide future action. | 1.47pm: The talks between striking Greek seamen and the country's development and labour ministries (see 11.31am) have just wrapped up but not, we can report, on the best of notes. Emerging from the negotiations members of the seamens union, PNO, said they would now hold talks to decide future action. |
| One PNO official told the state-controlled TV news channel NET: | One PNO official told the state-controlled TV news channel NET: |
We are categorically opposed to the policies being pursued by the government at the behest of the troika [the EU, ECB and IMF]...We are very opposed to these measures. That is all we are willing to say. | We are categorically opposed to the policies being pursued by the government at the behest of the troika [the EU, ECB and IMF]...We are very opposed to these measures. That is all we are willing to say. |
Giorgos Bakakis, representing farmers on Crete, told NET that agricultural producers were conducting their own negotiations to try and persuade the striking seamen to allow perishable goods to be transported from the island by cargo ship once "every two days." The head of the Greek Industrialists Association (SEV) Dimitris Daskalopoulos is also causing waves after weighing into the dispute today. Among his incendiary comments he accused PNO of "not caring if the country sinks" by pressing ahead with the action at a time when all Greeks were being asked to make sacrifices. | Giorgos Bakakis, representing farmers on Crete, told NET that agricultural producers were conducting their own negotiations to try and persuade the striking seamen to allow perishable goods to be transported from the island by cargo ship once "every two days." The head of the Greek Industrialists Association (SEV) Dimitris Daskalopoulos is also causing waves after weighing into the dispute today. Among his incendiary comments he accused PNO of "not caring if the country sinks" by pressing ahead with the action at a time when all Greeks were being asked to make sacrifices. |
| Daskalopoulos added that Greece's upcoming general election (to take place either April 29th or May 6th) amounted to a national referendum in which voters would be asked to chose between backing parties that accepted policies that kept Greece in or out of Europe. "The choice will be between Europe or chaos," he said. | |
| 1.34pm: With the official start of spring upon us tomorrow, this is the week that Greek tourism traditionally kicks off. | 1.34pm: With the official start of spring upon us tomorrow, this is the week that Greek tourism traditionally kicks off. |
| And, as we reported yesterday, if Greece didn't have enough troubles the debt crisis appears also to be having a catastrophic effect on the tourism-dependent economy with German travel companies reporting a vast drop in bookings. Latest figures show that German arrivals are down by 50 % according to officials at the Greek tourism ministry. | And, as we reported yesterday, if Greece didn't have enough troubles the debt crisis appears also to be having a catastrophic effect on the tourism-dependent economy with German travel companies reporting a vast drop in bookings. Latest figures show that German arrivals are down by 50 % according to officials at the Greek tourism ministry. |
| Which is why, says Helena Smith, the Association of Greek Tourism Enterprises, otherwise known as SETE, has welcomed an ad campaign launched today by six of Germany's major tour operators under the slogan "For true friends, it is trust that counts." In the advert, the tour operators pledge their support for the country saying: | Which is why, says Helena Smith, the Association of Greek Tourism Enterprises, otherwise known as SETE, has welcomed an ad campaign launched today by six of Germany's major tour operators under the slogan "For true friends, it is trust that counts." In the advert, the tour operators pledge their support for the country saying: |
Greece remains one of the most important tourism destinations for German tourists. We are convinced by its beauty and value …. We are supporting Greeks and we will keep on supporting Greece as an attractive and open destination. | Greece remains one of the most important tourism destinations for German tourists. We are convinced by its beauty and value …. We are supporting Greeks and we will keep on supporting Greece as an attractive and open destination. |
| Among the travel firms backing the initiative are TUI, 1-2 Fly, Thomas Cook, Neckermann Reisen, ITS and Jahn Reisen. Together, they handle around twothirds of inbound tourism from Germany. | Among the travel firms backing the initiative are TUI, 1-2 Fly, Thomas Cook, Neckermann Reisen, ITS and Jahn Reisen. Together, they handle around twothirds of inbound tourism from Germany. |
| SETE said the campaign is meant to reassure Germans that they will not face any "problems" in Greece, following recent anti-German outbursts by demonstrators protesting austerity in Athens. | SETE said the campaign is meant to reassure Germans that they will not face any "problems" in Greece, following recent anti-German outbursts by demonstrators protesting austerity in Athens. |
| Normally German tourists top the league tables of arrivals in Greece followed by British visitors who this year have also dropped off largely because of the 2012 London Olympic Games. But many fearing the backlash of anger over Berlin-dictated belt-tightening are this year staying away (apparently one million Germans have cancelled package holidays to date). | Normally German tourists top the league tables of arrivals in Greece followed by British visitors who this year have also dropped off largely because of the 2012 London Olympic Games. But many fearing the backlash of anger over Berlin-dictated belt-tightening are this year staying away (apparently one million Germans have cancelled package holidays to date). |
| Andreas Andreadis, who heads SETE, said he saw the print ad campaign as being tountamount to a "vote of confidence" in Greece where earnings from tourism account for almost 20% of GDP. | Andreas Andreadis, who heads SETE, said he saw the print ad campaign as being tountamount to a "vote of confidence" in Greece where earnings from tourism account for almost 20% of GDP. |
| "Reverse action against the negative trend towards Greek tourism has begun," he said. | "Reverse action against the negative trend towards Greek tourism has begun," he said. |
| 1.09pm: In Italy, Mario Monti's government has begun informal talks with unions over his controversial proposed changes to Italian labour laws (see 8.21am for the details) | 1.09pm: In Italy, Mario Monti's government has begun informal talks with unions over his controversial proposed changes to Italian labour laws (see 8.21am for the details) |
| The formal meeting with union leaders are scheduled to begin at 3pm local time, but Reuters reports that Monti has already met with the leftwing CGIL union, as well as the "more moderate" (their words) CISL and UIL unions. | The formal meeting with union leaders are scheduled to begin at 3pm local time, but Reuters reports that Monti has already met with the leftwing CGIL union, as well as the "more moderate" (their words) CISL and UIL unions. |
| The government's labour minister, Elsa Fornero, is also holding seperate techical talks on welfare measures and job contracts. | The government's labour minister, Elsa Fornero, is also holding seperate techical talks on welfare measures and job contracts. |
| Fornero is the Italian minister who famously wept last December while trying to explain the details of Italy's €30bn austerity package. | Fornero is the Italian minister who famously wept last December while trying to explain the details of Italy's €30bn austerity package. |
| She was pretty resolute last night, though, telling Italian TV that she was prepared to overhaul Italy's employment laws without the support of the unions, if necessary. She said: | She was pretty resolute last night, though, telling Italian TV that she was prepared to overhaul Italy's employment laws without the support of the unions, if necessary. She said: |
| We can't keep going ahead and having endless discussion. | We can't keep going ahead and having endless discussion. |
| At the centre of Monti's proposed changes is Article 18 of the labour laws. It effectively forces employers to rehire any worker that a labor court rules was fired without just cause, and pay compensation. | At the centre of Monti's proposed changes is Article 18 of the labour laws. It effectively forces employers to rehire any worker that a labor court rules was fired without just cause, and pay compensation. |
| Strong employment laws are an important part of any economy, you might argue. Critics of Article 18, though, say it is unfair on employers -- and also younger workers, who are not offered fulltime contracts for this reason. | Strong employment laws are an important part of any economy, you might argue. Critics of Article 18, though, say it is unfair on employers -- and also younger workers, who are not offered fulltime contracts for this reason. |
| 12.37pm: Readers may remember that today, March 20, was the Red Letter day for Greece -- as €14.5bn of debt had to be repaid. One deadline which Athens and Brussels couldn't dodge, as failure to repay would have triggered a disorderly default. | 12.37pm: Readers may remember that today, March 20, was the Red Letter day for Greece -- as €14.5bn of debt had to be repaid. One deadline which Athens and Brussels couldn't dodge, as failure to repay would have triggered a disorderly default. |
| Instead, of course, Greece persuaded its private creditors to swap old bonds for new long-dated securities. This meant it qualified for its second aid package. And with nice timing, Athens just received the first installment of this aid package from the IMF, totalling €1.6bn. That's on top of the €5.9bn handed over by the European Financial Stability Facility on Monday. | Instead, of course, Greece persuaded its private creditors to swap old bonds for new long-dated securities. This meant it qualified for its second aid package. And with nice timing, Athens just received the first installment of this aid package from the IMF, totalling €1.6bn. That's on top of the €5.9bn handed over by the European Financial Stability Facility on Monday. |
| But as Helena Smith writes from Athens, the debt restructuring agreed two weeks ago did not cover all of Greece's bonds: | But as Helena Smith writes from Athens, the debt restructuring agreed two weeks ago did not cover all of Greece's bonds: |
| It emerges that Greece will have to repay €4.66 bn to the European Central bank and other European central banks, plus €200 million in interest, for three-year bonds that expire today according to finance ministry sources. | It emerges that Greece will have to repay €4.66 bn to the European Central bank and other European central banks, plus €200 million in interest, for three-year bonds that expire today according to finance ministry sources. |
| So €7.5bn comes into Greece's coffers, and €4.66bn promptly flows straight out again back to Europe's central banks. That reinforces the point that only a small amount of Greece's aid package is actually going to help the country rebuild. | So €7.5bn comes into Greece's coffers, and €4.66bn promptly flows straight out again back to Europe's central banks. That reinforces the point that only a small amount of Greece's aid package is actually going to help the country rebuild. |
| 12.06pm: Greece isn't the only member of the eurozone suffering transport strikes (see last post) -- Germany has also been hit by industrial action today over a pay deal. | 12.06pm: Greece isn't the only member of the eurozone suffering transport strikes (see last post) -- Germany has also been hit by industrial action today over a pay deal. |
| This picture shows subway trains parked up in a depot in Frankfurt early this morning, in the latest phase of an ongoing wage dispute called by the Verdi union. It is seeking a 6.5% increase this year for 2 million federal and municipal government employees. Last week, it rejected a 3.3 percent increase over two years. | This picture shows subway trains parked up in a depot in Frankfurt early this morning, in the latest phase of an ongoing wage dispute called by the Verdi union. It is seeking a 6.5% increase this year for 2 million federal and municipal government employees. Last week, it rejected a 3.3 percent increase over two years. |
| Negotiations are due to restart on March 28, and Verdi increased the pressure today by threatening to call a full-blown strike ballot if the German government doesn't agree. | Negotiations are due to restart on March 28, and Verdi increased the pressure today by threatening to call a full-blown strike ballot if the German government doesn't agree. |
| 11.31am: News in from Athens, where development minister Anna Diamantopoulou has begun crucial talks with representatives of the Panhellenic Seamen's Union [PNO]. | 11.31am: News in from Athens, where development minister Anna Diamantopoulou has begun crucial talks with representatives of the Panhellenic Seamen's Union [PNO]. |
| As we reported earlier, ferries and cargo ships have been impounded in ports for a second day as striking seamen press on with their pledge to conduct rolling 48-hour strikes. | As we reported earlier, ferries and cargo ships have been impounded in ports for a second day as striking seamen press on with their pledge to conduct rolling 48-hour strikes. |
| Helena Smith reports that pressure is mounting on the seamen from several quarters to abandon their action: | Helena Smith reports that pressure is mounting on the seamen from several quarters to abandon their action: |
| Local mayors on islands fearing food shortages, farmers who say their produce is already beginning to rot on docksides and panic-stricken tourism officials have all weighed in. | Local mayors on islands fearing food shortages, farmers who say their produce is already beginning to rot on docksides and panic-stricken tourism officials have all weighed in. |
| On Crete there is mounting fury that if the rolling, 48-hour walk-outs continue, millions of euros worth of perishable produce, mainly fruit and other crops, will be destroyed. The island's regional governor Stavros Arnoutakis has penned a furious missive to ministers heading the ministries of finance and public order calling for the strike to be resolved "immediately." Each day of industrial action is tountamount to €15m of damage inflicted on local agriculturalists, he says. | On Crete there is mounting fury that if the rolling, 48-hour walk-outs continue, millions of euros worth of perishable produce, mainly fruit and other crops, will be destroyed. The island's regional governor Stavros Arnoutakis has penned a furious missive to ministers heading the ministries of finance and public order calling for the strike to be resolved "immediately." Each day of industrial action is tountamount to €15m of damage inflicted on local agriculturalists, he says. |
| "The PNO strike, as you know, has cut off all of 'island Greece' because of the illegal blockade of the country's major ports. Crete's producers, who have suffered the biggest damage – around 15 million euro for every day of the blockade – respect the demands and the strike of the PNO but they are against the occupation of ports," the letter opined. "The economic consequences are catastrophic: perishable products, which can yield valuable exchange at a time of economic crisis are being destroyed … and we are losing important markets abroad. Producers and the island's various sectors are determined to protect their hard work and produce." | "The PNO strike, as you know, has cut off all of 'island Greece' because of the illegal blockade of the country's major ports. Crete's producers, who have suffered the biggest damage – around 15 million euro for every day of the blockade – respect the demands and the strike of the PNO but they are against the occupation of ports," the letter opined. "The economic consequences are catastrophic: perishable products, which can yield valuable exchange at a time of economic crisis are being destroyed … and we are losing important markets abroad. Producers and the island's various sectors are determined to protect their hard work and produce." |
| The minister of labour Giorgos Koutromanis is also participating in the talks, Helena reports: | The minister of labour Giorgos Koutromanis is also participating in the talks, Helena reports: |
| Seamen, who are protesting cuts in pensions and other benefits, say they are also determined to re-instate collective wage agreements as of 2012. The agreements, described by unionists as a hard earned right, are one of the casualties of the latest round of belt-tightening agreed by the government in exchange for a second round of rescue funds this time worth €130 bn in addition to the country's mass debt restructuring. Even if the talks end soon – and farmers on islands like Crete have given the government until tomorrow to come up with a solution – representatives of the seamens' union they will hold their own meeting to decide what to do next. "The seamen may be right but one man's justice cannot be another's injustice," said Dora Bakoyannis, the former foreign minister and head of the breakaway Democratic Alliance party. "It is urgent that this is resolved. Farmers on Crete are really hurting," said the politician who hails from the island herself. | Seamen, who are protesting cuts in pensions and other benefits, say they are also determined to re-instate collective wage agreements as of 2012. The agreements, described by unionists as a hard earned right, are one of the casualties of the latest round of belt-tightening agreed by the government in exchange for a second round of rescue funds this time worth €130 bn in addition to the country's mass debt restructuring. Even if the talks end soon – and farmers on islands like Crete have given the government until tomorrow to come up with a solution – representatives of the seamens' union they will hold their own meeting to decide what to do next. "The seamen may be right but one man's justice cannot be another's injustice," said Dora Bakoyannis, the former foreign minister and head of the breakaway Democratic Alliance party. "It is urgent that this is resolved. Farmers on Crete are really hurting," said the politician who hails from the island herself. |
| 11.15am: Orders at British factories have fallen by more than expected this month, the CBI reported this morning. It's monthly industrial orders index came in at -8, a deterioration from -6 in February. That's better than the long-term average, though, which economists say should mean that manufacturing activity expanded this quarter -- and thus the UK should avoid a double-dip recession. | 11.15am: Orders at British factories have fallen by more than expected this month, the CBI reported this morning. It's monthly industrial orders index came in at -8, a deterioration from -6 in February. That's better than the long-term average, though, which economists say should mean that manufacturing activity expanded this quarter -- and thus the UK should avoid a double-dip recession. |
| 10.57am: Christine Lagarde has issued a warning this morning that an oil shock could plunge the global economy into fresh disarray. | 10.57am: Christine Lagarde has issued a warning this morning that an oil shock could plunge the global economy into fresh disarray. |
| Speaking in New Delhi, the International Monetary Fund's managing director said that the Europe's debt crisis was now less acute, but oil had the capacity to spark a new crisis, if tensions over Iran escalated. | Speaking in New Delhi, the International Monetary Fund's managing director said that the Europe's debt crisis was now less acute, but oil had the capacity to spark a new crisis, if tensions over Iran escalated. |
| Lagarde predicted that global crude oil prices could rise by 20% to 30%, if Iranian supplies were significantly disrupted. | Lagarde predicted that global crude oil prices could rise by 20% to 30%, if Iranian supplies were significantly disrupted. |
| A barrel of Brent crude costs $124 per barrel today. On Lagarde's calculations, that price would rise above $160/barrel - a new record high - if the Iranian situation deteriorated. | A barrel of Brent crude costs $124 per barrel today. On Lagarde's calculations, that price would rise above $160/barrel - a new record high - if the Iranian situation deteriorated. |
| Lagarde is attending a seminar called "China-India: Sustaining High Quality Growth". Earlier today, she had told the audience that "we are further away from the abyss than we were three months ago,". She welcomed Europe's efforts to tame the crisis, such as the new fiscal pact, adding: | Lagarde is attending a seminar called "China-India: Sustaining High Quality Growth". Earlier today, she had told the audience that "we are further away from the abyss than we were three months ago,". She welcomed Europe's efforts to tame the crisis, such as the new fiscal pact, adding: |
| Crisis was a major agent of change but you don't want to have to go there. | Crisis was a major agent of change but you don't want to have to go there. |
| India's finance minister, Pranab Mukherjee, met with Lagarde earlier today. According to the IMF boss, the two "particularly discussed" the eurozone. | India's finance minister, Pranab Mukherjee, met with Lagarde earlier today. According to the IMF boss, the two "particularly discussed" the eurozone. |
| 10.39am: A heads-up for later. Greece's communist party is planning to hold protests in Syntagma Square, outside the Athens parliament, this afternoon (starting at 6.30pm local time, or 4.30pm GMT), to coincide with a vote on Greece's new fiscal programme. | 10.39am: A heads-up for later. Greece's communist party is planning to hold protests in Syntagma Square, outside the Athens parliament, this afternoon (starting at 6.30pm local time, or 4.30pm GMT), to coincide with a vote on Greece's new fiscal programme. |
| According to local reports, protest rallies are also being organized in Thessaloniki and other cities around Greece. | According to local reports, protest rallies are also being organized in Thessaloniki and other cities around Greece. |
| The protests are unlikely to prevent the Greek parliament giving its approval for Greece's second financial aid deal, as Lucas Papademos's government has a large majority. | The protests are unlikely to prevent the Greek parliament giving its approval for Greece's second financial aid deal, as Lucas Papademos's government has a large majority. |
| 10.18am: European stock markets have fallen back today, as fears over the Chinese economy override lingering relief that Greece's second aid deal was agreed. | 10.18am: European stock markets have fallen back today, as fears over the Chinese economy override lingering relief that Greece's second aid deal was agreed. |
| In the City, the FTSE 100 is down 61 points at 5899, down 1.04%. The French CAC is down 39 points at 3538, down 1.09% The German DAX is down 77 points at 7076, down 1.08% | In the City, the FTSE 100 is down 61 points at 5899, down 1.04%. The French CAC is down 39 points at 3538, down 1.09% The German DAX is down 77 points at 7076, down 1.08% |
| As my colleague Josephine Moulds explains here, mining giant BHP Billiton warned this morning that Chinese demand from iron ore is "flattening', suggesting that China's economic growth may be weaker than expected. | As my colleague Josephine Moulds explains here, mining giant BHP Billiton warned this morning that Chinese demand from iron ore is "flattening', suggesting that China's economic growth may be weaker than expected. |
| 9.59am: Sticking with Spain, new data this morning has shows that bad debts have risen to their highest level since 1994. | 9.59am: Sticking with Spain, new data this morning has shows that bad debts have risen to their highest level since 1994. |
| The Bank of Spain reported that in January 7.91% of loans held by banks are at least three months overdue for repayment, or slightly over €140bn in total. Before the financial crisis, just 1% of loans on the books of Spanish banks were 'bad'. | The Bank of Spain reported that in January 7.91% of loans held by banks are at least three months overdue for repayment, or slightly over €140bn in total. Before the financial crisis, just 1% of loans on the books of Spanish banks were 'bad'. |
| The data also showed that overall credit in Spain fell by 3.2% in January, compared with the previous year, suggesting that banks are hoarding cash and building up their capital reserves. | The data also showed that overall credit in Spain fell by 3.2% in January, compared with the previous year, suggesting that banks are hoarding cash and building up their capital reserves. |
| 9.54am: Spain's borrowing costs have fallen again, continuing the recent trend of successful debt auctions. | 9.54am: Spain's borrowing costs have fallen again, continuing the recent trend of successful debt auctions. |
| It sold €3.6bn of 12-month bills at an average yield (the interest rate on the debt) of 1.418%, down from 1.899%, plus €1.45bn of 18-month bills at a yield of 1.711%, down from 2.3%. | It sold €3.6bn of 12-month bills at an average yield (the interest rate on the debt) of 1.418%, down from 1.899%, plus €1.45bn of 18-month bills at a yield of 1.711%, down from 2.3%. |
| 9.49am: Later today, US treasury secretary Tim Geithner will urge EU leaders to resist imposing tough austerity measures as they attempt to break free of the European debt crisis. | 9.49am: Later today, US treasury secretary Tim Geithner will urge EU leaders to resist imposing tough austerity measures as they attempt to break free of the European debt crisis. |
| Geithner will deliver his warning to the US House Financial Service committee when he testifies at 2pm GMT. His prepared remarks show that he will predict that the next few years will be tough, and even harder if European leaders cut too deeply in response to disappointing economic data. | Geithner will deliver his warning to the US House Financial Service committee when he testifies at 2pm GMT. His prepared remarks show that he will predict that the next few years will be tough, and even harder if European leaders cut too deeply in response to disappointing economic data. |
| Here are the key quotes from Geithner's prepared remarks: | Here are the key quotes from Geithner's prepared remarks: |
Economic growth is likely to be weak for some time. The path of fiscal consolidation should be gradual with a multiyear phase-in of reforms | Economic growth is likely to be weak for some time. The path of fiscal consolidation should be gradual with a multiyear phase-in of reforms |
| If every time economic growth disappoints, governments are forced to cut spending or raise taxes immediately to make up for the impact of weaker growth on deficits, this would risk a self-reinforcing negative spiral of growth-killing austerity. | If every time economic growth disappoints, governments are forced to cut spending or raise taxes immediately to make up for the impact of weaker growth on deficits, this would risk a self-reinforcing negative spiral of growth-killing austerity. |
| For these economic reforms to work, policymakers in the Euro area will have to be careful to calibrate the mix of financial support and the pace of fiscal consolidation. | For these economic reforms to work, policymakers in the Euro area will have to be careful to calibrate the mix of financial support and the pace of fiscal consolidation. |
| Several EU leaders have recently called for a greater focus on growth, rather than an all-out push for fiscal consolidation. Yesterday, Greece's Lucas Papademos told the Financial Times that new stimulus measures should be added to the country's existing economic programme. And Spanish PM Mariano Rajoy has already forced the EU to agree that Spain will aim for a less challenging deficit target this year. | Several EU leaders have recently called for a greater focus on growth, rather than an all-out push for fiscal consolidation. Yesterday, Greece's Lucas Papademos told the Financial Times that new stimulus measures should be added to the country's existing economic programme. And Spanish PM Mariano Rajoy has already forced the EU to agree that Spain will aim for a less challenging deficit target this year. |
| America's economy is now growing much faster than the Eurozone's, so Geithner may feel he can offer advice across the Atlantic from a position of strength. | America's economy is now growing much faster than the Eurozone's, so Geithner may feel he can offer advice across the Atlantic from a position of strength. |
| But that growth is partly due to the Federal Reserve's various monetary easing programmes, which outpace the ECB's own moves and must, at some stage, be unwound. The US is also putting off its own fiscal cutbacks until after the upcoming presidential election. This year, it will post a deficit around $1.2 trillion. | But that growth is partly due to the Federal Reserve's various monetary easing programmes, which outpace the ECB's own moves and must, at some stage, be unwound. The US is also putting off its own fiscal cutbacks until after the upcoming presidential election. This year, it will post a deficit around $1.2 trillion. |
| Of course, as a 'proper' monetary union, America has two advantages over Europe's poorer regions. Complete control of its currency (and the ability to print as much as it wants, regardless of the inflationary consequences), and full fiscal transfers within the union, allowing richer states to subsidise poorer ones. | Of course, as a 'proper' monetary union, America has two advantages over Europe's poorer regions. Complete control of its currency (and the ability to print as much as it wants, regardless of the inflationary consequences), and full fiscal transfers within the union, allowing richer states to subsidise poorer ones. |
| 9.32am: Just in - UK inflation fell again last month, but not as fast as economists had expected. | 9.32am: Just in - UK inflation fell again last month, but not as fast as economists had expected. |
| The consumer prices index came in at 3.4% (on an annual basis) in Febuary, down from 3.6% in January. The City was expecting CPI to drop back to 3.3% (Reuters' poll) but today's number is still the lowest annual level since November 2010. | The consumer prices index came in at 3.4% (on an annual basis) in Febuary, down from 3.6% in January. The City was expecting CPI to drop back to 3.3% (Reuters' poll) but today's number is still the lowest annual level since November 2010. |
| On a month-on-month basis, prices rose by 0.6% in February, compared with January. | On a month-on-month basis, prices rose by 0.6% in February, compared with January. |
| The retail prices index came in at 3.7% on an annual basis, down from 3.9% the previous month, but again higher than economists' predictions of 3.5%. | The retail prices index came in at 3.7% on an annual basis, down from 3.9% the previous month, but again higher than economists' predictions of 3.5%. |
| The Office for National Statistics said that the main downward drivers were housing, recreation and transport costs, while alcohol and tobacco were the main upward drivers. | The Office for National Statistics said that the main downward drivers were housing, recreation and transport costs, while alcohol and tobacco were the main upward drivers. |
| My colleagues on the economics desk will have the full story shortly. | My colleagues on the economics desk will have the full story shortly. |
| 8.54am: European Union leaders have been accused of "moral decay" for delaying Greece's debt restructuring by two years while they strengthened their banking sector. | 8.54am: European Union leaders have been accused of "moral decay" for delaying Greece's debt restructuring by two years while they strengthened their banking sector. |
| Carl Weinberg, founder and chief economist at High Frequency Economics, claimed in a report that Greece's first bailout was deliberately limited, because EU banks were not in a position to swallow losses. | Carl Weinberg, founder and chief economist at High Frequency Economics, claimed in a report that Greece's first bailout was deliberately limited, because EU banks were not in a position to swallow losses. |
| Weinberg asked, rhetorically: | Weinberg asked, rhetorically: |
Why wasn't Greece allowed to restructure its debt two years ago, before its economy contracted by 15 percent, and before it was necessary to impose a haircut on private sector borrowers, destabilize the government and the economy, illegally implement retroactive collective action clauses, and trigger credit default swaps.... | Why wasn't Greece allowed to restructure its debt two years ago, before its economy contracted by 15 percent, and before it was necessary to impose a haircut on private sector borrowers, destabilize the government and the economy, illegally implement retroactive collective action clauses, and trigger credit default swaps.... |
| It was inconvenient for the banks, that is why. | It was inconvenient for the banks, that is why. |
| Do we agree? | Do we agree? |
| It's certainly true that Greece's initial financial package, agreed in May 2010, wasn't wide-ranging enough (thus the need for the second deal). But Weinberg's claim that the likes of Angela Merkel and Nicolas Sarkozy deliberately "put a few million Greek citizens through the wringer" is open to debate.... | It's certainly true that Greece's initial financial package, agreed in May 2010, wasn't wide-ranging enough (thus the need for the second deal). But Weinberg's claim that the likes of Angela Merkel and Nicolas Sarkozy deliberately "put a few million Greek citizens through the wringer" is open to debate.... |
| 8.43am: In Greece, ferry services remain disrupted today as the Panhellenic Seamen's Union (PNO) continue their 48-hour strike – despite pleas from Greek farmers who say they will suffer badly from the disruption. | 8.43am: In Greece, ferry services remain disrupted today as the Panhellenic Seamen's Union (PNO) continue their 48-hour strike – despite pleas from Greek farmers who say they will suffer badly from the disruption. |
| As we reported yesterday, PNO workers down tools (and anchors) in protest at cuts to pensions, and changes to collective labor contracts. With boats stuck in harbours until at least tomorrow morning, many of Greece's islands are cut off. | As we reported yesterday, PNO workers down tools (and anchors) in protest at cuts to pensions, and changes to collective labor contracts. With boats stuck in harbours until at least tomorrow morning, many of Greece's islands are cut off. |
| Development minister Anna Diamantopoulou is due to meet with representatives of the Panhellenic Seamen's Union (PNO) later today. She blasted the disruption yesterday, saying: | Development minister Anna Diamantopoulou is due to meet with representatives of the Panhellenic Seamen's Union (PNO) later today. She blasted the disruption yesterday, saying: |
| Every blow against agricultural production, against tourism, against the islands, against the national economy, is a blow against the unemployed Greek, the pensioner, the worker. | Every blow against agricultural production, against tourism, against the islands, against the national economy, is a blow against the unemployed Greek, the pensioner, the worker. |
| 8.21am: Mario Monti has enjoyed a decent spell as Italy's prime minister since replacing Silvio Berlusconi four months ago. Austerity measures have been passed, borrowing costs have fallen, and EU leaders and economist have both cheered his performance. | 8.21am: Mario Monti has enjoyed a decent spell as Italy's prime minister since replacing Silvio Berlusconi four months ago. Austerity measures have been passed, borrowing costs have fallen, and EU leaders and economist have both cheered his performance. |
| Today's talks with unions, though, could unseat Monti's efforts to reform Italy's labour markets. Reuters claims that the price of failure could be: | Today's talks with unions, though, could unseat Monti's efforts to reform Italy's labour markets. Reuters claims that the price of failure could be: |
| mass strikes and ructions within Monti's left-right parliamentary coalition. | mass strikes and ructions within Monti's left-right parliamentary coalition. |
| But what is Monti trying to achieve? One of his key goals is to reform Article 18 of Italy's employment law, which gives workers strong protection against being dismissed. | But what is Monti trying to achieve? One of his key goals is to reform Article 18 of Italy's employment law, which gives workers strong protection against being dismissed. |
| Critics of the law claim it prevents employees from dismissing workers who simply fail to perform. Union leaders, though, fear indiscriminate job losses if Article 18 is changed. | Critics of the law claim it prevents employees from dismissing workers who simply fail to perform. Union leaders, though, fear indiscriminate job losses if Article 18 is changed. |
| Luigi Angeletti, the leader of the UIL union, has said that the Italian government must water down its demands, saying: | Luigi Angeletti, the leader of the UIL union, has said that the Italian government must water down its demands, saying: |
| An agreement is very possible.....All that must be done is to change the hard line. | An agreement is very possible.....All that must be done is to change the hard line. |
| More details here. | More details here. |
| 8.10am: Today's agenda includes two pieces of UK economic data, and an appearance by US treasury secretary Tim Geithner this afternoon to doscuss "the state of the international financial system". | 8.10am: Today's agenda includes two pieces of UK economic data, and an appearance by US treasury secretary Tim Geithner this afternoon to doscuss "the state of the international financial system". |
| • UK inflation data for February: 9.30am GMT • UK CBI industrial trends for March: 11am GMT • US Treasury secretary Tim Geithner testifies to the House Financial Services committee: 2pm GMT / 10am EST • Mario Monti meets with Italian union leaders: from 2.30pm GMT / 3.30pm CET | • UK inflation data for February: 9.30am GMT • UK CBI industrial trends for March: 11am GMT • US Treasury secretary Tim Geithner testifies to the House Financial Services committee: 2pm GMT / 10am EST • Mario Monti meets with Italian union leaders: from 2.30pm GMT / 3.30pm CET |
| In the debt markets, Greece will action 13-week bills, Spain will sell 12 and 18-month bonds, and Italy will auction four-year bonds. | In the debt markets, Greece will action 13-week bills, Spain will sell 12 and 18-month bonds, and Italy will auction four-year bonds. |
| 8.00am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis. | 8.00am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis. |
| Europe's two technocratic prime ministers will be busy today. In Rome, Mario Monti is holding crunch talks with unions over his proposals to reform Italy's economy. | Europe's two technocratic prime ministers will be busy today. In Rome, Mario Monti is holding crunch talks with unions over his proposals to reform Italy's economy. |
| Meanwhile, Greece is moving closer to an election footing as Lucas Papademos's government completes its last few tasks. That list includes the selection of a new finance minister, following Evangelos Venizelos's resignation yesterday. | Meanwhile, Greece is moving closer to an election footing as Lucas Papademos's government completes its last few tasks. That list includes the selection of a new finance minister, following Evangelos Venizelos's resignation yesterday. |
| Greece is also gripped by the strike action that the country's seamen began yesterday – ministers are due to hold talks with their union in an attempt to end the disruption. | Greece is also gripped by the strike action that the country's seamen began yesterday – ministers are due to hold talks with their union in an attempt to end the disruption. |
| We're also expecting protests outside the Athens parliament this evening as the final pieces of legislation covering its new economic programme are approved by MPs. | We're also expecting protests outside the Athens parliament this evening as the final pieces of legislation covering its new economic programme are approved by MPs. |
| And in the UK, the latest inflation data will be closely watched ahead of tomorrow's Budget. | And in the UK, the latest inflation data will be closely watched ahead of tomorrow's Budget. |